Visa, Walmart move to speed up chip card transactions

A software update speeds up transactions at the checkout, Visa and Walmart say.


The added security is all well and good, but why does using a chip-enabled debit or credit card have to be so darn slow?

It's a question impatient shoppers and retailers alike have been asking since the new chip card technology started rolling out widely last year.

Now Visa and Walmart say they've come up with fixes to get rid of those irksome few extra seconds at checkout.

Visa says a software update called "Quick Chip" will strip as many as 18 seconds from a typical checkout process using a chip card, while Walmart says it has cut the time of chip card transactions in its stores by as much as 11 seconds.

Consumers at stores that have made the Quick Chip update will be able to dip and remove their cards in two seconds or less, without waiting for the transaction to be finalized, according to Visa. Shoppers who want to save even more time will be able to dip their cards while their items are still being rung up — a trick previously only possible with a traditional magnetic stripe cards.

Visa says the update will be offered free to payment processors, which will be able to decide if they want to charge merchants for the upgrade. Consumers won't need to make any changes to the chip cards already in their wallets to use the faster service.

Stephanie Ericksen, Visa's vice president of risk products, said surveys showed that transaction speed was an area where consumers and merchants wanted to see improvements and that the new system will allow "the consumer to put their card back into their wallet more quickly."

While slow transactions can be irritating to consumers, they're particularly troublesome for retailers that have to choose between seeing their revenues hurt by long checkout lines or employing more staffers for additional checkout lines.

A study carried out by JDA Software Group for a national retailer with more than 4,000 stores found that the extra eight to 12 seconds per checkout would have led to an additional $3.2 million in labor costs.

Marty Reynolds, vice president of retail solutions for JDA, which helps many national retailers plan their supply chains, said the speed of chip card transactions can vary significantly from store to store, depending on what equipment and network technologies the store is using.

Walmart, which was an early adopter of the chip card technology in November 2014, says it has already reduced transaction times for chip cards to the point they are comparable with traditional card transactions, according to Walmart spokesman Randy Hargrove.

Walmart sped up the transactions by removing a prompt that asks the customer to confirm the amount charged, but has also seen speed increases "as customers have got used to the cards," said Hargrove, who added that the speed increases apply to all forms of chip cards, not just Visa cards.

Hailed as a more secure alternative to magnetic stripe cards, chip-enabled cards are accepted by about 20 percent of U.S. merchants, but have seen slower adoption than expected, according to analysts.

Since October, merchants that fail to make the switch to chip card technology have been held liable by the card companies for any fraudulent purchases made using magnetic stripe cards. Still, the $500 to $1,000 cost per terminal that merchants must buy to accept chip cards means some smaller retailers have been reluctant to make the switch.